Sprint reportedly is in talks with Clearwire, which provides 4G wireless broadband services in the United States, to further invest in the company and possibly acquire it. Citing unidentified sources familiar with the talks, Bloomberg News reported that Sprint would possibly team up with cable company Comcast, also a Clearwire investor. The sources said talks are only in the beginning stages and nothing has been finalized.
“The cable guys have this stake in Clearwire that they’re not doing anything with, they’ve got this spectrum they’re not doing anything with, they’ve got this relationship with Sprint they’re not doing anything with, and they don’t have a wireless strategy,” Jonathan Chaplin, an analyst at Credit Suisse AG in New York, told Bloomberg. “For Sprint, anything that shows more commitment from cable is really positive.”
Craig Moffett, an analyst at Sanford C. Bernstein & Co. in New York, told Bloomberg that cable companies like Comcast and Time Warner, also a Clearwire investor, are interested in Sprint’s continued existence as a wireless carrier, though he said he was unsure as to where Sprint would get the money to build out Clearwire’s network. “It’s going to take eight times as much square mileage to build the second half of Clearwire’s network as it did the first half, because the U.S. population is so spread out,” Moffett said in a Bloomberg interview. “Sprint can’t live without the rest of Clearwire, there’s no plan B, but Sprint doesn’t have enough money to fund it once they’ve got it.”
Clearwire recently announced it is adding “LTE Advanced-ready” technology to its 4G network. The initial implementation of Clearwire’s LTE (Long-Term Evolution) network would target densely populated urban areas of the company’s existing 4G markets where current 4G usage demands are high. The all-IP infrastructure already deployed in these markets could be leveraged to serve the company’s LTE needs, a Clearwire release said.
Clearwire’s LTE implementation plan, which is subject to additional funding, contemplates deploying TDD (Time Division Duplex) LTE technology and reusing its flexible all-IP network architecture and upgrading basestation radios and some core network elements. This will include the use of multicarrier, or multichannel, wideband radios that will be carrier-aggregation capable. Carrier aggregation is a key feature of LTE Advanced that will enable Clearwire to further leverage its spectrum depth to create larger “fat pipes” for deploying mobile broadband service.
The company also noted that since launching its first 4G market in 2009, video has become the largest component of the company’s overall data traffic and video traffic itself has increased more than tenfold since 2009. The company said it believes that as more video-intensive smartphones and services rise, so will the needs for Clearwire’s high-capacity 4G wholesale network.